BHP Billiton production hits records in four commodities

BHP Billiton has posted its 14th consecutive year of record iron ore output.

AAP: BHP Billiton

BHP Billiton says its total output is up 9 per cent, with record production in four commodities.

The company's key Western Australian iron ore operations posted a 14th consecutive annual production record of 225 million tonnes, with June quarter output up 19 per cent on the same period last year.

The world's biggest miner now expects to produce 245 million tonnes of iron ore in the current 2015 financial year, even as a key Chinese spot price has spent the last two months stuck below $US100 per tonne.

BHP Billiton says the prices it has received for its iron ore have fallen from an average of $US110 per wet metric tonne in the 2013 financial year to $US103 in the financial year just ended, with prices falling even further to $US96 in the last six months.

However, the firm has some of the world's lowest cost iron ore production, and is looking at even further expansion to 270 million tonnes a year capacity.

The company also increased its output of metallurgical coal used for steelmaking by 9 per cent, despite a 20 per cent fall in prices for hard coking coal.

However, production of thermal coal, used for power generation, was down 1 per cent in the June quarter as prices weakened from an average of $US81 a tonne in the 2013 financial year to $US70 a tonne in the most recent financial year just ended.

"Western Australia iron ore and Queensland coal annual production exceeded guidance, with both rising by more than 20 per cent as we delivered more tonnes from existing infrastructure and growth projects ahead of schedule," said the company's chief executive Andrew Mackenzie.

The only really positive price news for BHP Billiton was a jump of 16 per cent in natural gas prices globally, and a 25 per cent rise in the US.

The company expanded its petroleum production by 9 per cent in the June quarter, with oil up 23 per cent and natural gas output steady.

"In petroleum, we are investing in our highest-return acreage while a broader improvement in productivity is expected to underpin stronger iron ore, copper and metallurgical coal volumes," said Mr Mackenzie.

"We will remain focused on value over volume as we prioritise our brownfield development options and consider the next phase of portfolio simplification."

BHP Billiton says, as at the end of the 2014 financial year, it had eight projects under development with a combined budget of $US14.1 billion - it says most of these were at existing sites and therefore lower risk.

However, the company has also sold off $US6.7 billion in assets over the past two years.

It has also flagged one-off costs and writedowns of up to $US1.3 billion related to costs associated with mine site rehabilitation, and also redundancies as it seeks to lower costs at existing operations.